The president thanked the American public for believing in him and said he would return to Washington more determined and inspired than ever.

"I have listened to you, I have learned from you and you have made me a better president," he said.

"We are and forever will be the United States of America, and together, with your help and God's grace, we will continue our journey forward and remind the world just why it is that we live in the greatest nation on Earth."

He pledged to reach across the aisle to work with Republicans and named immigration and tax reform among the things on his second term agenda.

"You voted for action, not politics as usual," Mr Obama said.

"You elected us to focus on your jobs, not ours, and in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together - reducing our deficit, reforming our tax code, fixing our immigration system, freeing ourselves from foreign oil."

The nationwide popular vote remained extremely close with Mr Obama taking about 50 per cent to 49 per cent for Mr Romney, after a campaign in which the candidates and their party allies spent a combined $2 billion.

But Mr Obama comfortably won the electoral votes needed in the state-by-state system used to choose US presidents.

He scored impressive victories across the country, so much so that the big build-up over Ohio, Virginia and Florida fizzled.

Mr Obama reached the 270 electoral votes needed for election even without those three states, rolling up wins in Democratic strongholds and carrying Nevada, Iowa and Colorado.

In the end, he also won Ohio and Virginia and is ahead in Florida, where votes are still being counted.

Tough road ahead

Despite the victory, President Obama is likely to face an equally divided Congress that was evident in the past four years, with the Republicans maintaining control of the House of Representatives and the Democrats retaining their majority in the Senate

In the House of Representatives, the Democrats failed to capture an extra 25 seats to change the balance of power.

The United States faces a so called "fiscal cliff", a $US600 billion package of automatic tax increases and spending cuts, scheduled to take effect at the end of 2012, that could severely strain economic growth.Mr Obama is expected to demand tax increases for the wealthy as part of a deal to reduce spending to tackle the nation's deficit.

The Republican speaker John Boehner said retaining the House of Representatives showed that American voters made it clear that there is no mandate for raising taxes.

However, he pledged to work with all members in Congress to achieve a fiscal breakthrough.

You have no doubt been hearing a lot about the Paris Agreement and know that it pertains to climate change, but are too embarrassed at this stage to ask for an overall explanation of what it's all about.